Absa pulled strings at Pinnacle Point

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The inquiry into the affairs of Pinnacle Point Group, a JSE-listed property developer that was placed in final liquidation late last year, entered its third day yesterday. The inquiry into the affairs of Pinnacle Point Group, a JSE-listed property developer that was placed in final liquidation late last year, entered its third day yesterday.

Absa essentially pulled the strings at Pinnacle Point Group "at a certain point", a commission of inquiry heard yesterday.

The inquiry into the affairs of Pinnacle Point Group, a JSE-listed property developer that was placed in final liquidation late last year, entered its third day yesterday. Steven Kruger, the former financial director of the group told the inquiry that Absa was at some point, the "de facto" controller of the embattled property developer.

"They (Absa) had the cheque book …," Mr Kruger said. Before Mr Kruger could explain further, his legal representative requested to have a private discussion with the head of the inquiry, retired judge Meyer Joffe. Upon their return, Mr Kruger did not explain further what he meant by "de facto controller".

Last month, Absa said it would be going to court in an attempt to recover more than R773m from Nedbank for losses it claims it suffered after taking over an exposure to Pinnacle Point through the single-stock futures debacle.

Seven people, including former directors and shareholders, have been subpoenaed to appear in the first round of the inquiry, which is due to conclude tomorrow. The second round will commence at the beginning of April.

It is understood that Absa effectively had a say in the appointment of Hennie Pretorius as CEO of Pinnacle Point in 2009.

Mr Pretorius, who replaced Wilfred Robinson, sources say, was sent in by the bank to oversee the operations of the property development firm.

It is understood he drew two salaries, one from Absa and another from Pinnacle Point.

Mr Pretorius is scheduled to give his testimony today.

Pinnacle Point’s subsidiaries were lent more than R200m by banks, and workers’ pensions worth R250m were invested in the group.

Investec is a major creditor of the subsidiaries. The private bank applied for the liquidation of the subsidiaries to recover money owed to it. Investec claimed the group owed it R120m.

In his testimony yesterday, Mr Kruger said there was a plan in place to pay back the loans.

According to minority shareholder of Pinnacle Point and owner of Cape Point Vineyards, Sybrand van der Spuy, although there could have been an intention to pay back the loans, the chances of that happening were minimal.

Mr van der Spuy told the inquiry in his testimony on Monday that there was also a "zero percent" chance of the R250m of misappropriated clothing workers’ pension fund money being recovered.

Workers aligned with the Southern African Clothing and Textile Workers Union had invested the money to buy shares in Pinnacle Point Group. The value of the shares has since diminished significantly.

The inquiry continues today with Pinnacle Point chairman Ivor Stratford also due to testify.

 


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